Correlation Between PT Bank and EMPEROR ENT
Can any of the company-specific risk be diversified away by investing in both PT Bank and EMPEROR ENT at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining PT Bank and EMPEROR ENT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Bank Rakyat and EMPEROR ENT HOTEL, you can compare the effects of market volatilities on PT Bank and EMPEROR ENT and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in PT Bank with a short position of EMPEROR ENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and EMPEROR ENT.
Diversification Opportunities for PT Bank and EMPEROR ENT
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BYRA and EMPEROR is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and EMPEROR ENT HOTEL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMPEROR ENT HOTEL and PT Bank is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on PT Bank Rakyat are associated (or correlated) with EMPEROR ENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMPEROR ENT HOTEL has no effect on the direction of PT Bank i.e., PT Bank and EMPEROR ENT go up and down completely randomly.
Pair Corralation between PT Bank and EMPEROR ENT
Assuming the 90 days trading horizon PT Bank Rakyat is expected to generate 5.18 times more return on investment than EMPEROR ENT. However, PT Bank is 5.18 times more volatile than EMPEROR ENT HOTEL. It trades about 0.07 of its potential returns per unit of risk. EMPEROR ENT HOTEL is currently generating about -0.27 per unit of risk. If you would invest 23.00 in PT Bank Rakyat on October 27, 2024 and sell it today you would earn a total of 1.00 from holding PT Bank Rakyat or generate 4.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Bank Rakyat vs. EMPEROR ENT HOTEL
Performance |
| Timeline |
| PT Bank Rakyat |
| EMPEROR ENT HOTEL |
PT Bank and EMPEROR ENT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and EMPEROR ENT
The main advantage of trading using opposite PT Bank and EMPEROR ENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, EMPEROR ENT can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in EMPEROR ENT will offset losses from the drop in EMPEROR ENT's long position.| PT Bank vs. Virtus Investment Partners | PT Bank vs. PLAYWAY SA ZY 10 | PT Bank vs. InPlay Oil Corp | PT Bank vs. SEI INVESTMENTS |
| EMPEROR ENT vs. Monster Beverage Corp | EMPEROR ENT vs. Suntory Beverage Food | EMPEROR ENT vs. MOLSON RS BEVERAGE | EMPEROR ENT vs. Japan Asia Investment |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |